OREANDA-NEWS. January 15, 2009. Vladimir Putin, Chairman of the Government of the Russian Federation, had a working meeting with Sovcomflot’s Chief Executive Officer.

At the meeting Sovcomflot’s CEO reported on the Group’s results for 2008, the first year following the merger of the State-owned assets of Sovcomflot and Novoship. It was noted that mainly due to the timely decision to unite the two largest national tanker companies (Presidential Decree of 20 June 2007 No.784 on Sovcomflot Joint-Stock Company), Sovcomflot has not only achieved record-breaking results, but is well positioned to continue its steady development despite the softening freight market conditions.

The Group’s gross revenue for 2008 was USD 1.65 billion (+ 33 per cent), with EBITDA of USD 848 million (+ 33 per cent), and Shareholders’ capital of USD 3.01 billion (+ 11 per cent). As at 31 December 2008, the Group’s fleet comprised 132 ships with a total deadweight of more than 9.4 million tonnes.

The Head of the Government was informed that the Board of Directors approved the detailed consolidated budget for the Group in 2009 and also the annual budget to 2011, which allow the Group’s investment programme and dividends payments to remain intact. As planned, over the next two years, the company’s fleet will expand by 31 vessels, amounting to 2.7 million dwt, at a total cost of USD 2.0 billion. Sovcomflot is using both Russian and international shipyards to fulfill these shipbuilding orders.

Sovcomflot’s CEO Sergey Frank informed the Chairman of the Government about the goals, tasks and the basic parameters of the Group’s Development Strategy for the period to 2020. Preparation of this strategy will be completed during the first quarter of 2009.

The Group’s strategy includes, in particular, the growth of orders from Russia’s shipyards, including tankers for the transportation of liquefied natural gas (LNG) of 75,000 mі capacity, product tankers of 70,000 dwt, bunker tankers, ice-class tugs, offshore support vessels and offshore drilling platforms. The Sovcomflot Group remains the largest customer of the civil shipbuilding industry in Russia. All the orders completed by the Russian ship builders are to the highest quality standards and within the terms specified in the commercial provisions of the contracts.

Taking into account the investment potential and with the support of its shareholder, the Sovcomflot Group is planning to take advantage of the current world market trends to enter new business segments, mainly related to serving offshore oil and gas development, including the purchase of non-core shipping assets from oil and gas companies.

In the current situation with the cost of assets declining, the Sovcomflot Group, as the largest national shipping company, plans to further expand its activities, including through acquiring appropriate shipping assets in Russia and abroad, which are consistent with the Group’s development strategy.

The procedures envisaged by the Group’s development strategy, including the current investment programme, will contribute to the creation of new jobs in Russia’s shipping and shipbuilding industry, as well as related segments of the economy.